tv Closing Bell CNBC November 2, 2015 3:00pm-5:01pm EST
are you worried about this market peaking? >> but i would have nowhere to live. you have to live somewhere. >> i actually think it's cheap relative to -- relative to other cities. >> there you go. steve, a real pleasure. thank you so much. >> my pleasure. >> thanks for watching "power lunch." "closing bell" starts right now. and welcome to the "closing bell," everybody, i'm kelly evans back here at the new york stock exchange. >> welcome back. you were all over the place last week. i'm bill griffeth. a lot of number crunching going on here today. stocks are pretty good rally mode right now fueled in part by a mini mergers and acquisitions monday. visa, conagra, pharmaceutical company shire. just a few of the names that announced deals. we will look at whether this momentum could continue on into the end of the year on a day
that the nasdaq 100 hits an intraday high. >> do you up 155 points. taxing trade towers fill the illinois budget shortfall. the protest taking place outside the cme coming up. >> plus ship olt lay shares hit after the mexican restaurant chain was linked to an e.coli outbreak in the pacific northwest. we have someone who says customers will still be loyal to that restaurant chain. he will explain why coming up. and ceo of clorox will join us live to talk about the company's quarter and whether international head winds as we watch that strong dollar could soon be a bigger issue. >> that stock is setting all time highs right now. let's begin with today's flurry of mergers. bob pisani has highlights for us. robert. >> three of them, interesting deals and a little bit of disappointment on some of those. conagra, it is up fractionally as you can see. they are going to sell their
private label business to tree house foods, $2.7 billion in cash. that's a little little disappointing. they spent almost twice as much to buy it three years ago. there's about almost a quarter of their business is that private label business. they're selling the bulk of it now, 17 billion soointd market cap. wear bashar al assad ner mind they are a little bit disappointing because of the numbers and what they're getting for t sees is a, their subsidiary, visa europe, they're buying it, 21 your rows, the whole point of doing this, they have to compete against mastercard. more importantly chase pay, remember that was announced last week, they are aligning with retailers. they have to act aggressively so they're moving that. visa is down 3%. that's because of division appointing earnings and guidance, that's a little bit below expectations. by the way, we will get a lot more on this the cfo of visa
will be right here with kelly 4:10 today. we will have more on that. finally all is not rosy in and & a land. remember electrolux has wanted to guy ge's appliance business. apparently they've broken down late friday. the u.s. government is going to try to stop the deal arguing it would be anticompetitive. some 6 these december are not necessarily in great shape. you have to look carefully at the anticompetitive antitrust issues. >> do you know what i was surprised at and this goes back to some of the eej nl bank tie ups, a lot of those shares aren't performing well and we are seeing more red on the screen than we are used to where it seemed like anytime there was a tie up everybody was rallying. >> the antitrust issue is a major problem now. the u.s. government has stepped in and is attempting to block a number of these deals going on
including this electrolux deal. i think a lot of people thought there would be an agreement how they could get the doj to agree and let the whole thing go through. i think that's the major issue right now. >> all right, bob, thanks. see you a little bit later. let's get to our "closing bell" exchange for this monday as we begin the month of november jason pride from glen meade is with us, so is ben willis from princeton securities and rick santelli is at the cme in chicago. ben, you know, kelly and i were talking earlier, we are at 2100 on the s&p right now, the last time we were there was in mid-august just before the big market break. after that market break people were looking at some of the analyst who is say they saw 2100, maybe 2200 by the end of the year and now here we are again. what do you make of all that? >> i would include myself in one of those people who said it was a buying opportunity way back then. it took a lot of nerve to stand in front of it, it was the much
wanted correction by most professional traders, we kept begging for correction for years that never came. when it hit it caused a lot of people to do a gut check. what we're seeing at princeton securities is the move away from china in that china was under focus for so long, now it's a trade that's too crowded. nobody goes to china because there are too many people there. in the united states the u.s. consumer has taken over an what you're seeing right now is a move to the russell 2000 going to new highs along with the s&p and that is u.s. consumer centric. the u.s. discretionary stocks and you have to include healthcare when you talk about u.s. discretionary spending. >> on that point are we looking at the u.s. consumer to power this market forward, the discretionary, staples names and to your end. >> i would actually argue that it's a pretty broad story right now. if you look at the numbers that we're getting from the purchasing major indexes, japan showed good news last week, we saw good numbers out of europe
as well as good news out of the u.s. the ism confused the story a little bit today but on the whole if you're looking around developed markets are sitting good domestically. we have a slow down that seems to be now fading away a little bit in china and on the whole what we're coming to realize and what investors are realizing and the reason the market is rising is this chinese-related growth scare is something that was very temporary in nature in terms of its magnitude and effect on the global markets and economies and we are now back to an expansion naer mode for those markets and economies. >> and, rick, as equity indexes hit the upper end of a recent range so too for treasury yields on the long end, the yield on the ten year moving back to highs although as you were pointing out that was where we were last year as well. do you expect higher yields down the road here? >> you know, i don't. i think that we're going to have a couple of chapters where yields due to market logistics may get crazy like last october but all in all i expect that we
learn a lot today. five-year notes 155, pretty much all day long, 217 or 218 on tens all day long, 295 on 30s all day long. unchanged on the year as you pointed out on 10s and let's face it, i completely disagree with our guests just because markets right themselves don't mean economies right themselves and the chinese economy might have gotten a pass because of all the activities of central planners. that will only take you it so far. if markets perform better when the training wheels are on and you could never take them off, maybe the indexes will hold up, but eventually that will catch up, too. >> not only that is correct jason, but it's quite clear that people are going from the old china to the new china trades. if you look at the commodity space there's no sign we're going to go back to levels that we saw during the chinese driven super cycle. >> yeah, we are definitely not of the camp and making -- i need to make sure that you guys get this right at least from our
perspective. we are not of the camp that the slow down in the chinese industrial exporting base is over. we are in the camp that the services side of their economy is now larger than their old line manufacturing side of their economy. that consumer side of their economy is picking up some of the slack. it's still not a very positive story. they're going to be slowing down and probably continue slowing down over the next four or five years, but it's not as bad of a scenario as people were trying to paint in august and september. so i think that's what's changed, people are now coming to that realization and realizing that the global economic expansion still intact as a result. >> back to rick's point about why the equity market continues to rise, it's a question i've been asking for a couple of weeks, is our market trying to anticipate a better economy down the road or simply a continued delay before the fed starts to raise rates again? >> it is a better economy, the gd numbers that we are seeing
come out are not spectacular by any means, it's one of the worst recoveries in the history of the united states, but the fact of the matter is the u.s. consumer is driving the local, the home market, but it's not in its typical form as people continuing to expect tend spend to go come from the savings and gasoline to go into some of the restaurant trades that trade didn't really happen because the beneficiary was actually the healthcare sector, the premiums that have to be picked up and continued premiums being paid, that's why you see the out performance of the some of the stocks in the healthcare sector. >> that has been the over averaging trade in the last couple years. people seemed to be spooked in the healthcare buckets today. whether it's on drug pricing, what's happening with hospitals, that sort of thing. is that trade over for some reason do you think as a rotation taking place? >> no it's an adjustment to a broad portfolio where basically if you were in the healthcare sector it floated all boats. now you're seeing some of those
boats getting holes shot in them like veil yant and the like so you have the individual stocks being sold off but the group itself you still have to look at the fact that somebody is being paid, the hospitals are being paid because of obamacare, the drug manufacture are being paid whether a justified price or not they are being paid. that going back what i mean on china, yes, the industrial side of the equation has slowed down but the market has adjusted for that slow down in anticipation of a slower gdp but the straights economy, our market had a correction of 10% into august, that is pricing in that slow down that we were anticipating impacting by china and now looking forward the u.s. economy continues to put on a good show which is why the equities markets are putting on the show they are and the bond market is starting to react understanding that their rates are going up, the only question on the rates going up is the timing and its stra jekt ri. >> rick, before we let you go, tell us more about this protest.
it ended a little while a i guess a local issue in illinois, people wanting to see taxation on trading at the cme who help close a budget gap in illinois. >> listen, it was mostly young people, bill. i can relate, young people, there is a lot of anger out there and young people in particular are getting the bill for a big entrée and dessert they didn't enjoy but they also need to do homework. anybody out there raise your hand ever heard of the song star dust by hoagie carmike alley? it happened to have been in 1927 which is the last time chicago elected a republican mayor. the only reason i bring it up is whether it's public unions or driving businesses out of illinois, young people need to do a bit more homework. i understand their anger, but pointing the large financial entities for higher taxes will only accomplish one thing, it will drive them to wisconsin or indiana. >> i was wondering as well, rick, i see that rahm emanuel
was able to increase property taxes there pretty significantly, another way to try to help cover all of this. what do you think that does? does that make a step in the right direction towards writing the ship or just drive more people out of the city? >> it just drives more people out of the city. unless somebody steps up and is willing to make tough decision toss admit to people that past promises paying for services today that were used a long time ago is not an equation for growth and if we don't get growth it had will just continue its negative spiral and it's sad for all parties involved. >> it is. all right. thank you guys. appreciate it this after jon. a little history levin as well. star dust by hoagie carmike alley 1923. do you think the krubs still haven't won a world series in that time. on we go. >> hoagie who? >> i will explain later. >> 45 minutes or a little more to go. the dow is up 145 minutes at the moment, the s&p 500 is up 23. back above 2100, the nasdaq
having a nice special, up 67 points, about 1.3%. >> serious story out of the pacific northwest with chipotle mexican grills shutting down all restaurants in washington and oregon because of an e.coli outbreak. we have someone who says that chipotle customer loyalty will not waiver in the long-term. he will explain why. then we have another huge wave of after the bell earnings led by aig and fit bit. we will bring the numbers to you as soon as they hit the tape with a wall street top a analyst. stay tuned. with centurylink as your trusted technology partner, you get an industry leading broadband network and cloud and hosting services. centurylink. your link to what's next.
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welcome back. what a day in markets here to kick off the first trading day of the month. energy leading the way, even though oil is a little bit lower, exxon, chevron on friday reassured investors to some degree, it's up 2.5%, healthcare up nearly it 2%. meanwhile, the financials doing pretty well. a second ago telecom was in the red but at this point all ten are in the green. >> tradition tells us november is kind to the stock market. >> but october was so kind. >> it's not supposed to be. i know. are we already at the peak? who knows. we will find out.
meantime, hewlett-packard leading off our movers. beginning a new era today as two separate companies in the fortune 50. hp inc. will continue to sell printers and computers and will deep the hpq ticker symbol of the legacy company. is that stock has risen mostly in nearly two and a half years, in the past two and a half years. hewlett-packard enterprises which will sell server and storage devices is trading under hpe. meg whitman explained why she spear headed this break up on kns earlier. >> we looked at the marked and looked at their strengths and being smaller an more nimble is an advantage. this is a completely different capital structure. two different strategies. we have a lot of confidence that our strategy will be right.
>> whitman will be the ceo of hewlett-packard enterprises and share of hp inc. est alloweder is rising the most in more than three years today, better than expected earnings helped by new products and luxury fragrances. they increased their quarterly dividend by 25% to 30 cents a share. there's that consumer again. >> shares of chipotle mexican grill are lower after the chain shutting down restaurants in portland and oregon. >> the lunch bag thought from chipotle is that the world is complicate bud does every complicated problem prior to a. complicated solution. they say it will be difficult to find out which ingredient made 22 people six, sent eight people to the hospital but fortunately no deaths. most of the people but not all
say they ate at chipotle. as a precaution the company has shut down all stores in both states. last august chipotle had a salmon ella problem in chicago and a store was cleaned after dozens of people showed norovirus. in oregon they said they ate over a week ago. >> we certainly expect the people can still become ill even if the risk is no longer present because the incubation period can be up to ten days, although it's usually two to three days or four days. >> no cause yet and no determination that all of the cases are related. health officials say the most recent cases of e.coli in the u.s. have been in produce not in undercooked meat and americans are flying more fresh produce either in stores or restaurants. suntrust says if the 43 stores stay closed for a week it would hit quarterly same stores he
sale growth by one fifth of 1%. the negative publicity is more difficult to game. still calls today's sell off an overreaction. >> jane, thank you. stay with us. >> let's bring in food industry researcher bob golden, he is executive vice president at consulting firm tech nomic. clearly this is having an impact, the stock is down 3%. people may be rethinking an order they made at chipotle otherwise today. you think this will not bode ill for the company long-term. why? >> i don't think so, bill. i think chipotle has tremendous good will among its customers. we tracked the customer loyalty and perceptions of over 100 chains and chipotle is one -- is among the highest ratings. i think they are handling it responsibly and i think consumers tend to get past these kind of issues relatively
quickly. >> is it your opinion that chipotle has had more than its fair share of these scares? >> they have had a couple -- you know, they're a very high profile chain, a lot of their activities speak to high profile and they have had several outbreaks and some of it is due to the fact that they are heavily reliant on fresh produce as you pointed out earlier, jane. >> i think that really is the issue. we're going to have to have more and more focus on the supply chain for these companies. fresh, fresh, fresh is all we want right now and a lot of it organic, too, no pesticides or herbicides that are synthetic. it's good that we want to eat healthier but it will then bring up more and more cases like this where you have to be so vigilant on the supply chain. >> bob, i mean, we had the two outbreaks this summer, one in minneapolis, one in california, right in jane's backyard in simi valley. we pointed out there was another one in '09, another one in '08. how many times will those loyal customers give chipotle before
they rethinking th that i they're going to order there again? >> again, i don't believe it's going to have a long lasting impact. i also think many customers sort of just ignore it. i happened to walk by a couple chipotles this afternoon, the lines -- in downtown chicago, the lines are still very, very long. people love chipotle, chipotle is a unique company in terms of how it connects with their consumers and i think they will be very responsible and get through this. >> bob, before we let you go, though, this gets to a really interesting point. the food supply chain has been transformed by this demand for fresh and organic ingredients to a large extent. what happens if we start seeing the magazine profiles, the stories about, wait a minute, what if this is causing more food borne illnesses? what happens then? >> i think it's going to put some tremendous challenges on the food supply, exactly what you said, the food supply chain. we as consumers i think assume that food is safe and the
incidents tend to be because of human contamination getting into food. i think it's going to cause us to be more vigilant, present real challenges. we do agree with you the move is towards fresh, natural and it's more than a move, it's a mega trend. >> it would be the ultimate irony if natural did not mean the same as healthy. early days something for everyone to be mindful of. thank you for joining us. >> we want to hear from you, we want to know if you will still eat at chipotle despite this e.coli outbreak. so far a little more than half of you but a little more than half are saying you would still eat there. we will have the final results at the end of the show. we're heading to the close with 37 minutes left in the trading session here. rally day to begin the month of november, the dow up 157 points, the nasdaq 100 hit a new intraday high, first level we have seen on the nasdaq 100 going back to march of 2000 at the peak of the dot-com boone.
>> we have had to scramble to go back to the record high sheets. bringing them all back out again. >> and write them down in pencil, too, they may not last. >> coming up, the ceo of clorox speaks with us about the household product maker's solid gains in this country. >> when we come back lou diamond phillips is here new york stock exchange and he is promoting his movie about chilean miners being trapped before being rescued. we will talk about the 33 when we come back. the challenges of keeping everyone working together can quickly become the only thing you think about. that's where at&t can help. at&t has the tools and the network you need, to make working as one easier than ever. virtually anywhere. leaving you free to focus on what matters most.
40% of the streetlights in detroit, at one point, did not work. you had some blocks and you had major thoroughfares and corridors that were just totally pitch black. those things had to change. we wanted to restore our lighting system in the city. you can have the greatest dreams in the world, but unless you can finance those dreams, it doesn't happen. at the time that the bankruptcy filing was done, the public lighting authority had a hard time of finding a bank. citi did not run away from the table like some other bankers did. citi had the strength to help us go to the credit markets and raise the money. it's a brighter day in detroit. people can see better when they're out doing their tasks, young people are moving back in town, the kids are feeling safer while they walk to school. and folks are making investments and the community is moving forward. 40% of the lights were out, but they're not out for long.they're coming back.
welcome back. the rally continues, picking up pace as we head toward the close, the dow is up 174 points. yeah, nasdaq is the strongest today, up 1.4% now with a gain of 72 points. biotech you can imagine one of the growth engines in that sector today the biotech, the ibb index is up 3.8% today. >> they've had a tough couple weeks, though. in 201033 chill yen miners were trapped in a caved in mine. it captured the world's attention for 69 days, five years later lou diamond phillips are recreating the rescue effort in the movie the 33. >> joining us now to talk more about it we are pleased to welcome to post 9 the great
actor lou diamond phillips. >> thank you. >> we have a lot to talk with you about. the 33 we all remember that, what an amazing story that was. they were underground for 69 days before they were rescued. >> not that they are proud of that, that it's a record, no one has survived that long underground and all 33 men, 33 trapped, i think the world knows a very happy ending, all 33 made it out, a billion people watched while it was covered by the global media and we're telling the story. >> how did you get involved in the project. >> fortunately for me i heard about the film early on. i literally will be yeed to get into the film. i've known anthony owe for a number of years and wanted to work with him and the director was a fan of my work, it worked out. >> we want to get the business aspects. i read where she made all of you not only speak in english but with a chilean spanish accent. >> we probably got the most
international cast ever assembled, france, ireland, spain and americans and columbians and chileans, mexicans. so we all had to get on the same latino accent page, if you will. so we had a vocal instructor for the film. >> the movie was shot in columbclu columb columbia, though. taxes and give backs helped. >> a little bit. the dollar went a long way but we were actually able to shoot in a couple of mines, a couple of salt mines in a little town just outside of bogota, but we filmed the exteriors in the dessert a mile away from where it happened. >> speaking of campaigning, fans campaign to get long meyer renewed on netflix. >> yes indeed. >> how are you finding the addition of these new media platforms helping your career if it is. >> 100%. there are other outlets for -- we see it all the time.
really great shows don't get a chance to breathe, they are killed in their infancy, long meyer had done three reasons on another network and our numbers were incredibly good. 5 to 6 million viewers a week. netflix was wise enough to say, wait a second, that's 5 or 6 million viewers that have just been disenfranchised we're going to pick those up. our fourth season just streamed along with all three of the previous seasons and it was just allowanced on friday we will be making a season five. it's all working out just great. >> i'm amused to see it's a show that takes place in wyoming but you shoot it in new mexico. >> the other thing is infrastructure. there is not a lot of filming that goes on in wyoming where the show is set. santa fe i shot young guns one and two there. they are set up to shoot. >> is there a project or role for you that is just the must do? the treatment one? >> you know, not in the film world. i've been fortunate and my roles have been incredibly diverse
this year from the 33, i just played richard ramirez the night stalker, serial killer from the '80s in a film we will see next year, long meyer based on a novel. when i think about roles that i would love to do i think about the theater. i did the king and i on broadway in '96, '97, some day i'd like to play the scottish king, don keety. who know. >> he is a menacing character tonight on blind spot and i suspect we will be seeing more of you, too. >> it is about black ops and the fbi. >> i asked him which tattoo he was on the show but he doesn't want to go there. lou diamond phillips a thrill to have you. >> thank you. >> it will be out november 13th. coming up in a week or so we have breaking news on volkswagen. phil lebeau has details for us. >> volkswagen appears to be disputing some of the allegations that came from the epa about two hours ago when the
epa announced there are a total of 10,000 weeks in the united states that according to the epa are in violation of emissions standards and we listened in on the epa conference call and we very clearly heard the epa administrator say there were defeat devices on these vehicles that were tested. voluntarily, wag season out with a statement that says it wishes to emphasize no software has been installed in the 3 liter v-6 diesel power units to alter characteristics in a forbidden manner t goes on to say volkswagen hopes to talk with the epa to clarify this matter. appears to be a dispute about whether or not there were defeat devices on these vehicles. again, the epa says 10,000 more vehicles in the u.s. do have violations of emissions standards and that was the announcement earlier today. now you hear volkswagen disputing it. >> because if it wasn't defeat devices then what was it? >> kelly, i will tell you that i asked the question, several other reporters asked the
question looking for clarification from the epa, they stuck to the script and say it's an ongoing investigation. so there is a bit of a mystery in part because the epa is not coming out with all the information yet. >> maybe that uncertainty one of the reasons the stock is down almost 3% on an otherwise big up day. thanks very much. time for a consumer news update with sue herrera. >> here is what's happening. russian confirm that go both black boxes from the russian plane that crashed in egypt were recovered from the wreckage. they are expected to reveal what happened in the final moments of flight. in st. petersburg thousands of people flocked to the main square to mourn the victims of that crash. president obama signing the two-year budget deal that was passed by congress last week. the bill avoids a national default and sets federal spending levels through the 2017 dis fist cal year. blue bell ice cream has returned to store shelves in texas after being pulled six months ago due to listeria
concerns. stors began receiving shipments of the ice cream and there you see some of the employees in dallas forming a hand assembly line to load the ice cream on to the shelves. taylor swift is being sued for $42 million for allegations that she stole the lyrics to his 2014 hit shake it off. singer jessie brom claims that he has the copyright ownership stemming from a 2013 song he wrote. shake it off is one of swift's biggest singles going platinum eight times. >> back to you guys. thank you, sue. 25 minutes to go, the dow is now up 171 points, the s&p adding 25. the vix is lower on this investigation, the dollar is at pretty much unchanged after we digested what that key manufacturing report this morning and the nasdaq is up nearly 1.5%. >> one of the stocks parts pagt in the rally, clorox, the ceo will speak with us when we come ba about his company and the earnings gaining market share what some of the head winds may
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less than half an hour to go in this trading session. i'm joined by matthew chess lock for thoughts on what's behind this rally and where are we head snd. >> we obviously can see we are glass is half full as opposed to last month at this time we saw it was glass half empty. seeing broad based rally financials, energy strong, healthcare strong,. >> but look at how we finished last month, one of the best in quite some time. does d. that bring forward gains until the end of the year? >> i think a lot of people are chasing performance, it's a good time to chase performance while the glass is half full. when you see a market like we saw last month with one of the best gains in the last 25 years, you know, you keep riding that until something changes and we are not getting any change out of the fed just yet. >> true. this in your mind is predicated on it ask last until they raise interest rates. >> 13 or 14 speakers this week
so they're going to micromanage every bit of minutia that comes out of them. it will be subtle change and i don't think it will be too impactful. this market could be a little higher and it pains me to say that. >> pains you and a lot of people. >> i think touches on highs here it s. probably path of least resistance up. >> you know, one of the stocks participating right now in that important consumer sector is clorox. that's trading up almost 3% right now on an earnings report that beat expectations. the company seeing particular strength here in the u.s. joining us now in an exclusive we welcome ben odour, the ceo of clorox. thanks for joining us today. >> thank you for having me. >> you are in kind of a sweet spot. it was a good looking report, you had -- you have some pricing power now, you gained in market share, your stock is at an all time high. is this as good as it gets for
clorox? >> i feel very good about the quarter, i'm certainly very pleased with 3% sales growth. 6% sales growth in currency neutral terms and 20% growth in earnings per share year on year. it's really a reflection of our investments and growth and it's a reflection of a particularly strong innovation program, our strategy is working and we will stay the course. >> i'm looking at some of the products that fueled this. i guess it's glad scented trash bags, clorox disinfecting wipes, bert's bee's face care products, hidden valley flavored ranch. what's the secret here? is this about the millennial consumer asserting his or herself or what do you think? >> do you know what's working for news particular is our investments in a very strong and broad based innovation program and kelly you have mentioned some of the innovations that are certainly working very strongly for us. we are growing market share, we're growing market share in six out of our eight categories
and our absolute market share is highest as it's been in the last three years. we're also seeing market share growth being more strong than it's ever been. so we're feeling very good about winning with consumers, consumers are voting with their wallets and they're voting our way. >> like many companies you see some head winds with currency translation. tell us about that and what are you seeing? you know, give us your sense of the economy overseas right now. where are the weak spots or the strong spots right now? >> international business actually performed really well this last quarter with margin expansion and quite per difficult sales performance in currenty neutral terms of. but certainly like all of our peers we are seeing currency being a head wind with a strong dollar and we're also seeing some of the markets in particular in latin america slowing down. how we're responding is by taking pricing where we can, by
applying what is a very strong cost savings machine internationally and by managing our spending very responsibly. and that's led to a pretty solid performance last quarter like i said. long-term i feel very positive, in fact, about our international business, given the strength of our brands in many countries. >> coming back to the u.s., walmart is about to invest in stores to widen the aisles significantly, there will be fewer of those end of aisle promotional places, trying eliminate repetitive products and in general they are seeing margin go to the likes of amazon and others. do you like the changes that are taking place in the big box stores as you see it or is it possible that dot-com delivery direct to the household is your future? >> you know, walmart is investing in an improvement in in store experience and that plays into our hands because we have many of our brands that walmart shoppers like. walmart is also investing in
e-commerce and e-commerce happens to be our fastest growing channel so that again can provide a tailwind for the clorox company. so our business today with walmart is as strong as it's ever been and i remain optimistic that that will stay this way also in the future. >> before we go i just have to ask you given the events of the last 24 hours are you a fan of nascar or is this a legacy sponsorship. do you have any concerns about the behavior of some of the drivers in the last couple races we have seen, any qualms about continuing your affiliation with the sport? >> so, you know, we essentially go where our consumers go and we have been long standing sponsor of nascar and our number 47 car. so that's something that we remain committed to, we're always evaluating our response or ships and certainly we're taking developments like the ones that we have seen over the last 24 hours always into
account. >> okay. we'll leave it there. beno joining us. he is the ceo of clorox. >> thank you beno. >> thank you. >> pretty shocking race, by the way. >> you are the nascar fan. >> listen, all of these companies that we look at in the dow, 30 and others there is a lot of big sponsorship money on the line. we will see what happens as this all continues to shake out there. 15 minutes to go, the dow is up 181 points, the s&p now 2105, up 26, the nasdaq having a nice session. >> 25 points from an all time high. >> exactly. visa taking command of its brand with monster bid to buy visa europe, we will talk to the company's cfo. plus there are only ten days left to do some good and share a bench with kelly and me. we love this charity, the lou lou and leo fund. we are auctioning off a visit to the new york stock exchange to come watch us do "closing bell" live, then you can go across the
street with us to share a drink at one of the great watering holes on wall street and it's all for an organization that is near and dear to our hearts, the lou lou and leo fund. if you remember that story, if you don't you can look it up, but go to charity buzz.com and in the search put "closing bell" and you can bid bid to come have a brink drink. so far the people i've heard that want to come down and do this they are more excited about having a drink with you than with me. >> i thought you were going to say art cashin. >> we will probably get art to come join us as well. >> if you get that auction up high enough we will try to do all sorts of things. >> there will be other goodies this in there i'm sure. >> we're back right after this. it's more than the cloud.
home stretch here and it's a strong start to the month for these markets, the dow is up almost 1%, better than that for the s&p 500, the in a nasdaq leading the way up 1.4. >> art cashin just signaled 300 million to buy into the close. one familiar name, but new name set to report earnings, the familiar name is aig, the new name is fit bit and that's got seema mody's attention. mary, let's start with you on the tried and true in the insurance industry. what are you looking for? >> investors are focusing on
actions not earnings at the insurer are activists john paulson and carl icahn calling for insurance giant to split into three segments. what program it's making on cost cutting. third quarter earnings for the company seen falling 15% to $1.03 a share, quarter forecasts to be messy with loss of special items. investors will be looking for continued improvement in the combined ratio, a measure of their profitability in their personal and p & c lines. >> seema mody, how does it look forfeit bit. >> analysts expecting earnings of 10 cents a share on revenue of $351 million but beyond the headline numbers the street will be looking to see how the maker of wearable devices is holding up against the apple watch. also how many fit bits is the company expect to go sell during the holidays, that's where revenue guidance will be important. marketing expenses are expected to increase this quarter as the
company rolls out new products, the question is how is that impacting the growth margins picture. expect that to be a topic on the conference call. ahead of its earnings report sharing are up three quarts of a percent but 100% since going public in june. as soon as that bell rings those earnings will start to come. we have much more on today's big rally and whether it can last when we come back after this. stay tuned.
dow trading higher, we've got frost and frost wealth management co-founder robert frost. are you the first or second frost? >> i was born first so i guess i'm the first one. >> okay. that's how that works. what about this, this rally we're seeing that began in october, beginning of october and takes us back now for many of the major averages to levels we saw before the market break in august. >> surprising to a lot of people. >> yeah, it is. >> i think the market is getting back to fundamentals. we are trying to remind our clients over short periods of time the market trades on fear, anxiety, uncertainty but over a long period of time it trades on fundamentals and fundamentally this economy is getting stronger, it's not getting weaker. i think what we're seeing is just a pattern that started back
in september and it's continuing. we think it's going to continue throughout the end of the year. >> meanwhile we have some people looking at whether, you know, what approach is the right one for kpts these days. buy backs helped fuel this market for years, investors now aren't quite so sure. >> we'd like to see companies investing back into their business. i think the most notably of the two are gopro and visa. gopro i think disappointed i'm investors because what they should be doing analysts think is investing into research and development and back into their businesses. visa on the other hand a year ago they did a $5 billion buy back, their stock is up 40% since then, they are doing the same thing now, they are up 15% year to day. >> very quickly consumer stocks, related stocks, have been doing very well. do you continue with that. >> i think they're getting top-heavy but we are not afraid of the sector, we think there's still plenty of room for that sector to grow. >> robert frost from frost and
frost, he being the first one. we will be back with the closing countdown. >> i was guessing that you were going to be the second one, that it would be pops who would be the first or grandfather. after the bell visa's cfo will be here to talk about earnings, buy backs and their deal to buy visa europe. you're watching consumer, first in business worldwide. and a pon. and a pon. you like things that begin with p. i like pink frosting too. will you have a cake? yeah. i was too sick to have one last year. the data your doctor shared shows you are healthy. are you a doctor? no. i help doctors identify cancer treatments. i want to be a doctor someday. i can help with that too. watson, i like you. [ that's a good thing, eligible for medicare? but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company.
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two and a half minutes left. time for the countdown, bob pisani is with me. this rally just built as the day went on. pretty good open, we were up, you know, 8 0rks 90 points, 100 points a couple times but then it built steam here as we headed toward the close, we are up 161 points going into the close. the one index, though, that did set a new benchmark the nasdaq 100 intraday hit an all time high or hit a high let me say going back to march of 2000. finally this was the last of the nasdaq bunch that finally hit back to the march of 2000 peak of the dot-com boom and it's up 1.1% today. last one, we have the earnings coming out from aig and fit bit. already told you about that with mary thompson and seema mody, we will be on earnings watch when those both come up. both stocks up more than 1% today. bob pisani, good start to number for the bulls. >> it's hard to sort out how much this is first of the month, we saw a lot of volume in bond
eps today and that makes me think there's a little bit of an asset trade out of bonds and into stocks. two things even more exciting, one, china pmi numbers were a little weak, normally that means weak commodity price, all the commodity stocks were up, alcoa's, seemed to have no effect. >> oil stocks were higher. >> and here is what's really exciting, put up diamond offshore, one of the first of the drillers to report here. >> look at that. >> 99 cents was the earnings number, what? they have a consensus with 60 cents. so the number was better. up 11% today. now the hope is that the whole industry can manage the costs and control the downtime a lot better than people think. if that's right these numbers are underral lewd. i think that was a factor in helping the energy stocks up december might the fact oil was down. we have to see the other ones
reporting better numbers as well. >> thanks, bob. see you tomorrow. we are getting out with a rally to start the month of november off. bring ringing the "closing bell," people financial celebrating 125th anniversary going all the way to 1890 at the nas back is the executives at bcb. stay tuned for the earnings coming your way and a lot more on this second hour of the "closing bell" with kelly evans. thank you, bill. welcome to the "closing bell," i'm kelly evans. what a way to begin the month. here is how we're finishing the day on wall street, the dow adding 165 points, nearly 1%, the s&p 500 closing about 1 -- 2100. the biotechs were strong, even energy was strong, up 73% or 1.5%. investors are getting set for a pair of big earnings after the bell. mary thompson is covering aib
and seema mody covering fit bit. we also have all state, avis, pioneer. joining today's panel to talk through all of this we have our own mike santoli and kayla tausche and for more on today's markets and earnings "fast money" trader tim seymour. mike, just to start with you do you buy -- i don't mean literally but do you believe in the signal this powerful first day rally is sending us about november? >> i don't think about november. if you look at the pattern of a big first day of the month update you often flatten out. that's the case with know. i don't think it's about this sis nl and what it means for the rest of the year but i do think it tells you that the story that prevailed for months that was interrupted in august and september has kind of resumed again, which is high liquidity, you have the shorts being chased out, i noticed a lot of the heavily shorted stocks basically have capitulation there, small cap energy up 4%, things like shake shack up 5%. it seems like risk appetite is rebuilding.
we are now at the top of a range again and you know what that's men over the course of this year, it meant maybe you got capped out. >> kayla. >> i love how calmly mike describes we went through august and september. it's still pretty stunning to seat dow breaking even today. the nasdaq is up 8% year to date, s&p is up 2 and change percent for the year. every strategist that said buy the major averages going into this year if you didn't buy the dips maybe you're wondering if you missed your opportunity. >> this comes as the outlook for most other markets is a little more shaky. people have said japan is their favorite place to play, know we've looked at europe at the comps that starbucks put up recently. bring this back home to these major averages. how much room do you think they have to go? >> i actually think the markets are overboat. i've been saying that for a week. i've been wrong for about a week. i think you have a case where again we talked about positioning and mike talked
about this was a small interruption or august or september were. if you look, therefore, where people and how people played that last week we had 8 billion in s&p shorts covered by spec longs, the most mini contracts bought since 2013. a lot of this was about positioning. now we are back at a place where we were as everyone has just said. i think the fed is largely not priced in for december, i think volatility is not priced in. i think that the global growth story is better than people think, relatively, yes, back to japan and europe i think those are places where you have more earnings upside, in the short run i don't see why you have to chase this rally. i look at the canaries, where interest rate and commodity prices are. some of the worst of the selloff is in those prices. equities after an earnings season that was, you know -- i think you are at a place where you can take money off the table. >> day kay la. >> do you think the shear volume of what we're seeing in the m&a market gives you pause? should that be interpreted as a
bearish signal. i spoke to a hedge fund manager who said any monday where there are fewer than five deals that's a low day. >> companies rush to market to get corporate deal done. corporate debt activity or buy back activity is because they're engineering results and this is all they can do right nouchlt i also believe that that's not a bad thing. but when i look at where markets have been i think what we've seen recently is the function of where september was. september markets were closed and i think people need to rush into market now, whether it's over or not i don't know. the difference is equities have rallied dramatically in the last month. credit spreads are v. not. i think we still need to watch credit because i think the jury is out somewhat when volatility and a lack of liquidity could return to these markets. >> i'm glad you brought up buy back. this has been a raging gate for the last several years. the market is starting to give its own verdict. after applauding buy backs, pushing companies to do more of
them now that tide appears to be shifting. >> the marginal benefit of another incremental buy back is definitely diminished at this point. you are not seeing the heavy buy back names outperform the broad averages the way they were for more than a couple years but that's month ago, not just this week or last week. it seems like that drug we have kind of gotten a tolerance to it. it still could be rational behavior on these parties, you saw visa's announcement today, and ib you have a structurally challenged company trying to do what it can so that trick didn't work any longer. i still don't think it means that the rally has been false and it's been conjured by buy backs but it does show it tu takes more than just a debt for he can swit swap. >> aig is one company where people are saying in light of activist pressure from carl icahn and others maybe increasing their buy back is one thick but insurance you have some excess capital trying to figure out what to do with it. the question is for other
industries where that capital can be used for r&d, stuff that requires a lot more investment and long for bear fruit should they be doing for more of that. >> you have companies like ibm and visa who are saying their buy back will only take place in that it will cover the preferred shares we are issuing for other things. for aig i'm interested to see how this plays out and exactly what the company says on the conference call because it's hard to find any financially significant institution that does not not want to be -- everybody wants to lose that distinction and if they knew how to do they would have done it already. if they could increase their buy back they would have done it already. it's hard to see whether activist pressure will actually be meaningful in the financials. nelson found that out the hard way in a couple names he was in. >> i want to draw your attention to what is happening. fit bit shares down 5% after hours. their earnings are hitting the tape now.
the nongap earnings per share figure is 24 cents which is a beat relative to the 10 cent expectation. more details needed as we keep an eye on those shares moving lower after hours. before we go to that is correct mike, also i just want to draw everyone's attention what happened in the energy space. crude oil lower on the session and exxon up 5%, exxon has a better than -- >> the majors like chevron and exxon are not terribly leveraged to the raw price of crude, their downstream operations that have been carrying these businesses for a while and also it's the same story with the whole market. you are buying these mega cap bond equivalent stocks to play the rally. it wasn't about being tethered to the price of commodities. >> fit bit is moving lower still after hours. seema mody has more on the company's results. >> it is a beat from fit bit, the wearable device maker reporting 24 cents adjusted on earnings versus the estimate of
10 cents. revenue $409 million versus the estimate of $352 million. the company during the third quarter selling 4.8 million devices that's higher than co want and co's estimate of 4.3 million and the revenue jump represent ago 168% jump year offer year, we are looking at shares down by 5.7% after hours, now down over 7%. we will continue to dig through this earnings report, but overall a beat from fit bit. >> thank you. you guys can all catch james park in a cnbc exclusive tomorrow at 9:00 a.m. on squawk box, sidewalk on the street, "squawk box," 9:00, 9:30 -- anyway, you will catch him in the morning. "squawk on the street." fit bit shares are down 6% right now, tim seymour, do you wear one? >> i don't wear one, i'm all about wellness, but i think if you look at what you have here, you have a lot of competition but you have 175 times earnings, it's a stock that went from 32 to 43 2 right into these
numbers, it's a stock that has to grow aggressively on the top line, everybody knows about the wellness craze and also what's going on with overseas development here. i see a lot of komp tigs in this space, i see a lot of guys in their space, it's a big company and i wonder how they can continue to grow at that rate. that's what the market is doing on good numbers. >> their shares are well off their lows, now down only 1%. a healthy beat on revenues, mike. i understand they trade at lofty priced earnings multiples but if you can show the revenue growth early stages. >> usually and i mentioned yearly about the crowded shorts, this is a very heavily shorted name it did not rally today. there was a little trepidation did b. what the numbers were going to show. i think you have underneath it a story that has to play out about whether it is going to remain a gadget and hardware company or can transition to something else. it reminds too many people about gopro. it's a company coming out of the gate but it has that same kind
of feel to it. >> meantime i want to pick up on what we were saying about energy moments ago. i know that these big companies have a lot of different businesses they can return torques refining, chemicals but they also have natural gas and we are reminded again the prices there incredibly warm outside are going nowhere, crude oil down again today. what would you do with these energy names that were up 2.5% in the sector today. >> >> you don't need to buy them tomorrow. for chevron and exxon friday's numbers gave you a downward trajectory in terms of cap that's what the market likes and probably a more progressive downward trajectory for exxon. speaking of that the gas -- xto looks like a genius acquisition now not so much but either way i think buying energy shares the day after they move 5, 6% something something you don't need to do, we've seen the volatility in the space even though ovx is down dramatically.
i think the entire sector has bottomed. so by the best balance sheets you should be looking at places to buy weakness. >> today the nasdaq 100 not the composite but the 100 did close at a new 15-year high. mike, when we look at the names that are propelling these indexes it's not necessarily the small high flying names as we have fit bit and others reporting, look at last month, alphabet, amazon.com, apple. >> these global platform companies the category killers basically where they had their organic growth they don't face all that much competition. to me it's a nifty fifty type stuff, these companies that seem like they have it all figured out and don't need global gdp to kick up by 100 basis points for their story to work. >> how long does the nifty fifty work. >> a couple years at least. it's a little behavior before my time. it's a characteristics of late bull markets where you have a narrowing group of leaders. the energy leadership, you will
rolling bear markets come through this market this year. one of the ways you could see a bull case for the rest of the year is rolling bull markets in things like energy that got so beaten down it has to get back to some kind of neutral position. >> we also have facebook earnings on wednesday. given how much that index has been consolidated into the biggest tech names in it you bond from there's one name that can make or break what has been a pretty good pace. >> ken, what are you watching for the next move? >> one of the things that's interesting tonight on "fast money" we will talk about stocks that are at 52-week lows where there may be value in the midst of all this, some of those include walmarts, some of the transports, it's an interesting conversation to have. financials, if people think they are where we are which is back to the old playing books it means financials will lag, if the fed hasn't been priced in they will move. >> that move in financials. what is that, sn is that that about rates, better economy,
mergers and acquisitions, deal make sng. >> with regional banks it might be the m&a story heating up. >> hudson city and m and t close a deal that was announced more than three years ago. if that deal closes maybe most of the regional deals out there will be able to close. >> yeah. >> and then there's the fact you have financials up 8% in the last month. it's sort of more of a pile on -- >> i think we're slowly getting accustomed to the idea that december could be higher probability of a move. we have had a lot of false starts on that trade. >> we have etan of fed speak coming up which could rock the boat. coming up we will have more on fit bit's earnings. first visa's cfo tells us why they are buying visa europe in a deal worth $18 billion. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets
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well, we are absolutely delighted to be ee uniting the visa family so to speak under one roof. as you know, visa europe was independent until this deal. for visa europe this now gives them immediate access to the worldwide resources and technology of visa. for visa inc. it's a real opportunity for visa shareholders to get into 38 more countries, 500 million more card members, $1.7 trillion in payment volume. all in all we think this creates substantial long-term value for everyone involved and we've structured a transaction that gives all parties the opportunity to work together to building long-term value for their mutual benefit. we're thrilled about this. >> our bob pisani suggested that as chase pay has launched now giving a lot of attention kind of coming straight at the card companies, the payment processors i should say, is this a way for you guys to centralize command and make a global effort at combating some of the
innovation in final technology that we're seeing? >> no, this is unrelated to chase pay. chase is a big customer of ours, an important customer. chase pay is a new initiative, it's early days, we will have to see how that evolves. no. in fact, it's the other way around. we think by doing this transaction we can bring to europe the kind of technology we have here today, visa checkout, sees is a token service, m visa, visa direct. we have a lot of technology we have built and are deploying on a global basis. we have the opportunity to use the same platforms and actually really accelerate the pace at which european banks and european acquirers can get access to the best and greatest technology that we've built for the rest of the world. >> vasant, mike santoli here. i wonder if you could describe the process. it seems visa europe was not necessarily going to be for sale to any other partner.
is the market's verdict that maybe knocking your stock down a little bit suggesting that it was a rich price? >> well, first of all, you know, you never know why the stock moves as you know, mike, very well why the stock moves on any given day. we had a lot of news this morning, we talked quite a bit about our expectations for 2016. we have a business that is very robust, incredible sector growth but we have a few things that have make the 2016 numbers as reported hurt a little bit by exchange rates, by currency volatility, some weakness in the business. we think that was news that may have affected the stock but again you never know how the stock ponds on any given day. visa europe is a long-term proposition, there is a lot of long-term value to be created here. how did we come up with the value? we think we've come up with a great mix here in terms of cash, stock and earn out. if you add the stock and earn out almost half the value gives
both parties a real opportunity to build long-term value here and visa europe would benefit from that and frankly if we have to pay that earn out four years from now it would be a great deal for visa shareholders because significantly more value would be created than might be contemplated right now. >> it's not a done deal, though, vasant. this is kayla tausche. you will have to sell 15, $16 billion in bonds to fund this deal. the transcript you guys told investors this morning on the call that would happen maybe around december. what assurances do you have that the market is going to not only be open but also be receptive to a bond sale of that size at that time? >> well, first of all, we have no debt today. we have a lot of cash, we are a company that generates significant amounts of cash every year. there is a lot of demand for our kind of credit. the rating agency reaffirmed our ratings today at a 1, a plus. we believe the markets are there
for us. clearly we will have to wait and see how market conditions are in early december and if the time something not right we can even do it later if we want to. certainly 15 and $16 billion of that given our cash generation capacity we said today that we would have pre cash flow of $7 billion in 2016, we already have 6 or $7 billion worth of cash on our balance sheet. so it's rare for companies to have the ability to own debt like visa, in fact, they have never had that opportunity and it will be the first time. so we actually expect it could be very well received. >> they will have that opportunity now, vasant. thanks for coming on and explaining it a little bit. appreciate it. >> thank you. >> that is the cfo of visa. >> we have earnings to get to. aig in particular. let's take a look at those shares. mary. >> the company was expected to earn $1.03 a share, the earnings coming in well below that at 52 cents a share.
results in commercial and consumer line you saw profits decline in both of those. the company is taking a half a million -- excuse me, half a billion restructuring charge in the quarter. they are expecting additional staff reductions in 2016. the company saying this is to make the restructuring taken in order to make it a leaner more efficient operation. here are some quotes on the third quarter, the company saying prior to the prior year quarter its third quarter operating results declined due to lower income on hedge fund investments, including part of its holdings in the people's insurance company of china and picc property and casualty limited. so, again, aig right now which is the focus of activist investor carl icahn who is calling for the company to split into three different units disappointing results but taking a restructuring charge of half a billion dollars, it continues to make the company more efficient. and the company says it is
maintaining its financial targets for 2017. we do want to note the company will hold a conference call not today but tomorrow at 8:00 a.m. eastern. we will be listening to that. kelly, back to you. >> those shares only down 1.5% after hours on the results. the epa adding seven new weeks vooeks to voluntarikswagevolksw violations. we will find out what this could mean for their future. the votes are still coming. will you still eat at chipotle despite the e.coli outbreak. take our poll on twitter. 53% of you are saying you would still eat there. we will announce the final results at the end of the show.
welcome back. let's go back to fit bit shares which are falling sharply after their earnings report almost down 8%. >> fit bit delivering a strong beat but it's the forward looking statement that may be the reason shares are heading lower after hours. management citing the effects of a highly competitive market as a risk including competition from much larger technology companies, perhaps referring to apple and samsung. fit bit also announcing a full on offering where the company intends to sell 7 million shares. again, you are looking at shares down 8% after hours. kelly. >> all right. the secondary will certainly do that, seema, thank you for now. we have a news alert on donald trump and the republican debates. let's get the details from the "washington post." robert costa who just broke this story. first of all, what's going on here exactly? >> donald trump's campaign
behind the scenes has decided to negotiate directly with the television networks, bypassing his gop rivals and not agreeing to a letter they drafted on sunday. >> okay. so just walk back the events from the last 24 hours or so robert. yesterday evening the campaigns met, they were trying to come up with some reason why they were going to tweak the debates going forward, try to take control back from the rnc, correct? >> correct. >> after this meeting this now is happening. why? >> trump's campaign manager and other trump aids were at this meeting in alexandria on sunday, they met with a dozen other strategist other campaigns and they were trying to come to some consensus to put the power dynamic backs bank in the hands of the presidential campaigns rather than in the hands of the television networks or republican national committee. the trump campaign has soured on this possible letter that was drafted last night and decided to do it on their own terms in dealing with the networks.
>> if he does this will donald trump be accused of deepening a rift within the republican party and setting the party back much like he was asked to sign a pledge to -- >> his competitors could certainly make that argument but when you speak toin siders who are close to the trump campaign they say his case will be the opposite. they think he can make the argument that in the past presidential campaigns have negotiated directly with television networks, there is a press sent for what trump is doing now. >> so where does this leave us in terms of the republican national committee for the last several years trying to centralize the whole debate process to ensure a better outcome? it was dissatisfied with the last cnbc gate, the campaigns were as well. what happens now? i don't understand where this leaves everybody. does this mean donald trump is now -- his campaign is going to be directing negotiating with networks on the one hand and other candidates will be doing the same and where does that leave the rnc? >> it is clearly a mess. the republican national
committee is standing on the sidelines, ready to help if these campaigns can't come to some kind of agreement in how they want to deal with the television networks. at the same time a lot of these campaigns they are reluctant to go back to the rnc at least at this moment. ben carson's campaign tells us they are still going to try to move forward with this letter without trump's involvement but not having the biggest front runner part of the agreement may hurt his political capital. >> we have another debate coming newspaper ten days time. is donald trump suggesting that he won't be involved in these debates unless they are in accordance with how his campaign want to see it done. >> trump is planning 100% to be at the fox business network gate november 10th in milwaukee and will likely be at the gate cnn is hosting in december. it's to dictate his terms with the networks without dealing with his vie valls. >> wow. thank you so much robert for joining us. robert costa there of the
"washington post." time for a cnbc news update. >> here is what's happening in hour. president obama visiting the integrity house in newark, new jersey to discuss criminal justice reform. that is a nonprofit rehabilitation organization that provides support for formerly incarcerated individuals who wish to reenter and make a positive contribution to society. the white house says investigators have offered to help russian and egyptian authorities determine the cause of the russian plane crash that killed all 224 people on board in the sinai peninsula. it declined to say, however, if its offer was accepted. a study by ocean yan in a an ocean conservation organization says salmon was mislabeled as wild caught when it was farmed fish. two out of three times products labeled as wild fish can cost consumers 25 to 30% more money. salmon is the largest selling sea nood north america. attention kmart shoppers, the decades old blue light
special has returned. the struggling discount chain reviving the iconic marketing approach in hopes of improving its sales. shoppers will be alerted by blue shrines and sirens to flag the 15-minute long deals in every kmart store. that's the news update. back to you, kelly. >> when i first learned about the blue light special, sue, i thought that would have been kind of cool. now we all have a chance. >> you all have a chance to see it once again. >> all right. thank you, sue. >> sure. should you buy or sell shares of fit bit after the wearable device makes wearable fitness device makers earnings. we will hear from a top analyst with a buy on the stock down 10% after hours. plus a legal battle that's anything but sweet. the lead lawyer for the sugar industry laying out the case for why high truck toes corn syrup should not be called a natural sweetener.
welcome back. here is a look at how we finished the day on wall street. the dow up 165 points, the s&p 25, the nasdaq 73. and for much of the day all ten sectors were in the green. let's send it over to seema mody for an earnings alert here. >> avis budget shares moving lower on the back of a disappointing earnings report, reporting a missen its top and
bottom line earnings of 1.98 adjusted versus the timt estimate of 2.02. revenues coming in light. the company citing vens krensy head winds, also narrowed the full year earnings estimate and looking at shares down 8.6%. shares of hertz trading down in sympathy. >> after they had been up 5% on the session today. huge swing for avis. thank you. >> fit bit shares falling after announce ago new stock offering and a cautious outlook a few minutes ago despite an earnings beat. the stock down nearly 8%. we're joined by bob peck with a buy on the stock. welcome to you. are the shares down because of the secondary do you think? >> we think that's mostly t the revenues did beat that $409 billion even beat some of the numbers the clients were looking for rnd $400 million. gross margins north of 50%, costs for customers was down and
even the guide. you look at the high end of the geed ans it's higher than where the previously implied guidance was. and that 80 to 100 million of ebitda is higher than 85 million. we think it's more predicated on the lock up. 2 million shares can be sold by employees and then this offers, 21 million shares coming into the market. >> what do you need to hear from them in terms of the outlook for the coming quarter for holiday season. >> the number one thing will be on the new products. what are the new products that are coming, how can we see that differentiate versus the quality products, how are you responding versus competition on the low end versus the high end. investors will want to hear about the litigation and where that stands. >> what's your rating? >> we have a buy rating. >> what's your price target? >> 52. >> at $52 they are trading at what earnings multiple? >> they are just turning profitable. at that valuation it's four times revenues or 25 times
ebitda but that's for a top line growth. so when you look at them growth adjusted versus the universe it screens pretty cheap. >> does the margin guidance worry you, 48 to 48 1/2 percent for the full year would seem like a significant decrease from where it was in prior quarters. >> they are selling more of their higher end product right now which has a roar gross margin with it. when you look at the previously implied guidance it was morales than 48% for the 4 q period now we're talking about something higher than 48. >> what about the lock up, 7 million shares being sold by the company, 14 million potentially sold by investors. do you think this is more a company that's trading above it's ipo price being opportunistic or do you see it as a company that needs that capital? >> they've been successful obviously and you can see v dr. selling for what vcs do. the question for the actual shares they will get that cash for is what do you do with that cash, accelerating product roll out, h & a.
>> are you giving anyone fit bits for christmas. >> we are. we're giving them to our kids. >> seeing if your money was where your rating was. thanks for joining us this afternoon into thanks so much. >> that's bob peck. the epa hitting volkswagen with more violations. later it's sugar versus syrup, u.s. sugar processors are taking their corn growing counterparts to court over what counts as actual sugar. we will talk to one of the lead attorneys coming up. you're watching cnbc first in business worldwide.
welcome back. the epa adding seven more vehicles to volkswagen clean air act violations. phil lebeau has more details now. >> it's not just the allegations from the epa, but the response from volkswagen's this afternoon that is getting a lot of attention. volkswagen coming out and saying we are not in violation and the porsche brand acting surprised by these allegations. here is what the epa said today, they added seven more models that the epa says has defeat devices, essentially software could tso they can rig clean air admissions, you see the porsche cayenne, the first that's been accused as having falsified emissions. audi is not on a heck of a roll so this is not good news for the audi brand in north america.
there are 10,000 vehicles impacted by these rigged devices on the software of these models. the potential fine if it is not maximum is $375 million, but remember volkswagen is already potentially facing more than $18 billion in fines here in the u.s. and it's unclear at this point according to the epa whether or not volkswagen will have to stop the sale of these new or used models that might be at dealerships. now, in terms of what is at dealerships right now there are a slue of diesel models, 2 liter diesel models that cannot be sold. that is in effect going all the way to september. true scar estimating that that their advertising was up 29%. >> as we take a look at shares of volkswagen which you saw go under pressure midday, let me tell you what porsche had to
say, putting out a statement saying, we are surprised to learn this information. until this notice from the epa all of our information was that the porsche cayenne diesel is fully compliant. clearly either volkswagen does not have its arms around this problem or there is major miscommunication with the epa, but the epa says there are defeat devices on these vehicles. >> joining us with his take is bob nar deli. >> thank you. kelly. it's having that volkswagen is opt ago combative stands saying this time around it's not the defeat devices. >> it's amazing that, you know a brand with this breadth and the german reputation, the engineering, you know, and now you're talking about the real crown jewels in the family when you talk about audi and porsche so it's really amazing that they would not be aware of this or not have some complicity in what was going on.
this is a willful violation at least in the first recall to be determined on this second one. >> yeah. >> now, as phil said, you know, having worked with dealers for a long time in detroit myself they have to be enraged over having all of these cars parked out there. the next big thing talking with mary at gm, it's one thing to change an ignition switch, it's another to have to change out an entire engine and or put in a urea system to knock down the knocks at the exhaust or in fact detune the engine which would impair the amount of fuel efficiency of the vehicle. they have a fuel challenge on their hands to get this fixed. >> i'm wondering where this leaves the rest of the industry. this year we are seeing a record car sales pace but incentives are creeping up, ford has a friends and neighbors offer, what some of the others are doing to -- i don't know if they're trying to win volkswagen's market share or if you interpret some of this as a sign we are back to the days of 2005.
>> the friend and family and the pin number is something that's been around for a while. the fact that mark has got it out now and publicizing that and trying to promote it is clearly, you know, looking at share gain, looking at keeps volumes up. they have enjoyed a remarkable recovery from 2008 and 2009 to go from 9.6 million units annually to over 17 million. so it's been one of the real bright stars in what has been kind of a lackluster gdp recovery. >> sure. >> i think mark is trying to keep that alive and this is a great way to build brand loyalty out there and keep it going. >> do you think that this is just all pent up demand from that period or do you think that this is a broader signal of low gas prices impacting the consumer, the consumer feeling more confident or perhaps family and household creation? >> there is no question that fuel prices have helped all of the -- all of the auto manufacturers in the form of they are now buying the large suvs, the trucks, so that is a
wonderful mix. having been there we love the big suvs, we love selling trucks. the problem will come with the café standards because these are not going to be as compliant in meeting the epa requirements for miles per gallon. so we are looking at a collision down the road here if i can use that term between great mix, great profitability and complying with the new -- the café standards are going to require. >> how do these companies navigate that. >> you hear it from the traditional auto make rs that they have this mandate to keep investing in their minds maybe overinvesting in this development does it mean lower margins for everybody down the road? >> i think what's going to happen is when they put the new regulations in place like they talked about some off ramps and so either they are going to have to revisit off ramps or the administration is going to have to edict you can only make so much large trucks or suvs and try to force consumers into smaller more fuel efficient cars. i don't think that's going to happen. >> we'll see. bob, thanks for joining us this afternoon.
good to hear from you. that's bob nardeli formerly of chrysler. the sugar industry make taking the high fructose corn syrup companies to court. "closing bell" is back in two. o? whose analysis is accurate? how do you make sense of it all? a simple, unbiased stock score consolidated from the opinions of independent analysts... is that too much to ask? nope. equity summary score, powered by starmine, will help you execute your ideas with speed and conviction. and it's only on fidelity.com. open an account and find more of the expertise you need to be a better investor.
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welcome back. here is a check on shares of aig. down almost 2% now. several things going on with this company. of course,en pressure in the last couple of weeks as carl icahn is pushing on them to break them to break up. the company taking a restructuring charge and trying to make its case for saying otherwise as revenues as you can see there is well suffering. but the shares down less than 2%. a $1.5 billion trial begins tomorrow in los angeles where sugar growers are shoeing the corn refiner association for saying the refiners are saying it is natural sugar. the growers say that is false advertising. joining us now is mark len ear, you may remember mark, for the lawsuits over merck. and so i'm the judge and the
jury, make your case. >> case is simple. you got to tell the truth. even in advertising. there is a little bit of leeway, but you can't mislead consumers. that is what was done. the high fructose corn syrup refiners tried to say the product is the same as sugar and they are two distinct products. >> but does it matter if high fructose corn syrup is a derivative or made from sugar or a different representation of sugar? >> in a way that might make a difference if it were true. but the truth of the matter is it is a processed foodin vepted in a japanese -- invented in a japanese laboratory in 1955. sugar has been around for thousands of years. the differences between the two products are profound. don't get me wrong. they are both sweeteners. but beyond that, they are very distinct products. >> so high fructose corn syrup is made in corn and corn is sweet. but you are saying to call it a
sweetener is different from saying it is sugar. do you have a problem with them calling it natural? >> well natural is also a problem. because to make high fructose corn syrup, corn does not have sugar in it. so you have to manufacturer the fructose. so it is hardly natural. and yes, it is a sweetener, but you don't stick a corn cob in your coffee cup to sweeten your cup of coffee. >> mark, can you quantify or identify the level of harm that was experienced by the sugar makers through this deceit, as you might call it. >> yeah, i'm glad to. we're going to look at this in three different ways. first we'll look at it from the perspective of how much ill-gotten gains did the refiners get. that is about $1.1 billion. second, how will it make -- how much money will it take for
sugar to fix the wrong perception. around $500 million or $600 million. and third how much was the cost of the campaign itself and that is well over $130 million. so you put it altogether and looking at very real money. >> mark, i know this isn't material to the trial necessarily but plenty say this is the sugar industry's own fault. it is protected by various subsidies from the forward government and corn syrup is cheaper and the market went to the cheaper alternative. there is certainly an element of truth in that, isn't there. >> there is an element of truth in that. and i'm a capitalist. i believe in that. the key for me is not which one is the cheapest. the key for me is does the public have the right to know what is going on in their products and for the corn refiners not to like their name and want to try to call it sugar, when it is not sugar, that is the inherent problem. >> mark, americans seem to be voting with their dollars in
this situation. the consumption of corn syrup has gone down and sugar has remained pretty much the same. i'm wondering why -- why you are fighting something that behavior is voting against any way? >> that is a great question. here is what happened. in 2004 there was an article that came out that said it might be worse for you than sugar. and when that came out the demand for corn syrup started declining and as that demand started on a steep decline the corn refiners had to do something. so in 2008 they started a false advertisement that leveled out the decline and so we are looking for the delta, the difference between what the fructose market would have been versus what it became. >> mark, thank you for joining us. >> always a pleasure. >> we'll be watching. mark lenir. as we keep an eye on court.
welcome back. we asked and you answered. will you still eat at chipolte despite the e-coli outbreaks. the results are surprisingly split. 52% said you would eat there. it says 53% on screen. but i think 52% is the number. but still that is more than i expected. >> and i think 100 votes or something close to it get you close to significance. i don't think that is trivial. >> i wonder how many of the noes live in the pacific northwest where this is effecting it or other places in the country. >> there is a chipolte opening in my neighborhood within a week or so. i still expect the lines will be down the block. >> i ate at the one down the street on broadway and the line was out the door. >> and i know we have to be careful and wait until much more information comes in, but is there going to be a blowback. will people look and say is it
true that organic is open to more difficulties with securing the food supply. >> i wonder about that. organic and local. and just a company growing very fast and does not have the same kind of perhaps centralized process-oriented way of doing things that a larger established fast food company does. maybe so. >> we need more information from the company once it gets to the bottom of exactly where the source of this infection was. >> and mean time, chipolte stumbling for other reasons, going back to the earnings. consumer largely though holding in pretty well. but this rally gets us back on to the existing trend to date in 2015. so investors should jump back on the band wagon? >> people will feel as they missed as kayla said earlier. we are back where we were. 2100 at the s&p. we crossed it 48 different days from february to august so clearly there is something about this level that makes it hard to get much farther.
>> kayla and mike, thank you for joining us. that does it for "closing bell" today. "fast money" is coming up. what is up. >> the face-off with dennis gartman. nat gas versus oil. china versus the spd, gold versus the dollar and tough choices but he will choice. >> and i want to hear on the oil versus the natural gas. over to you guys. >> "fast money" is live from time square. your melissa lee. your traders can tim, pete, david and guy adami. tonight on fast, missed the rally. one top technician has stocked near 52 week lows that could bust out. the names might surprise you. and beam me up scottie or that is what cbs stock is saying after announcing a reboot of star trek that could give netflix a run for its money. and chipolte may be closing stores amidst of a p.r. nightmare but other fast food stocks are soaring. whether they could bring